HALP! - The Odyssey of Crowdfunding My Next Album
You see, I wanted to make a new music album this year: The Most Remarkable Album On This Entire Planet. In fact, that’s the actual title of the album. I own all kinds of technical equipment and musical contraptions, all waiting to join the action - yet the last piece of equipment missing from my home studio is … time.
As we all know, time equals money. I earn my living as a programmer. Being a full-time occupation, such a job can become quite stressful, and stress (my dear friends) does not contribute to an environment that nurtures the brilliant, focused and relaxed creation of amazing soundscapes. But that’s exactly what I have in mind. So where would I take this time from?
Then my musical colleague Auditory Canvas’ recent album release made me aware of Kickstarter, a site that organizes “fan-funded endeavors” or “crowdfunding” in a quite clever way. You set a monetary goal for your project and a fixed count of days to reach this goal. Fans can then pledge a small amount, in exchange for an appropriate reward (e.g. a physical copy of the album for a pledge of $20). Here’s the kick: no money is being transferred until the goal is reached. Only when funding has been successful, pledges turn into actual donations, and the project is completely financed. No risk for backers, no blame for the artist.
“Awesome”, my wife and I thought, and so we went ahead and started planning costs and rewards. We calculated for about four months of production, including manufacturing and shipping of CDs and other rewards, and we ended up at around $15,000 for the whole thing. I set up the project at Kickstarter, and everything seemed to be fine.
This is the timetable we’ve been setting up:
1. Launch project May 29th.
2. Collect pledges until July 12th. If goal is not reached, abort here.
3. Start writing & recording July 31st (my birthday).
4. Finish production November 5th.
5. Have all CDs shipped by December 1st. Merry Christmas.
Except for a little detail. It seems in order to receive funds, you need an Amazon Payments account linked to a U.S. bank account. The U.S. bank account in turn has to belong to someone with a U.S. social security number and a U.S. residence. We are Germans. Drats! We went around and asked our american friends, but no one wanted our money on his bank account. I should have claimed that I am the attorney of a Nigerian prince. I heard it works sometimes.
Allright, so we couldn’t use Kickstarter. IndieGoGo appeared to be a similar site on first sight, but the big difference is that there is no escrow account to hold pledges in limbo. Money is always being transferred, so in case the funding fails to reach the goal, we’re stuck with money we can’t use, and IndieGoGo has already taken 9% of it.
I started to panic (no pun intended). I checked other sites. Fundable is defunct. The Point looked good on first sight, but there’s something shady about the way they transfer funds. First of all, the FAQ remains awfully quiet about the nature of the payout. The only thing I could find was in the project setup form, where they ask where to send the check. Right. The check which gets lost in the mail, but someone cashed it anyway. I get it.
SellaBand looked real good until I checked their Terms and Conditions (thanks to @torusle for warning me!). First of all, they take 10% on each donation before adding it to the fund (so you pay $11, I see $10), then they take another 15% on the payout. That’s a whopping 25% on the entire transaction. Second, funds are transferred after I sent them an invoice, so it’s not a donation and I pay a purchase tax. Third, funds are paid within a maximum of three months. Three months! We wanted to get this baby done by Christmas!
Moving on. There are more sites like IndieGoGo, of which Pledgie seems to be one of the sweetest. They have no transaction costs. All they do is maintaining a little progress bar for your PayPal account, that’s it. But there is still the looming risk of a missed goal, and the manual reimbursement of funds - minus PayPal’s transaction costs. I doubt that backers want to take that risk.
Long story short: we need your insight and your assistance. Can you think of another way? Shall we try to circumvent the whole crowdfunding service thing and do the raising on our own? Would you contribute to our project in exchange for a professionally produced CD and other rewards? Would you take the risk of paying in advance, without knowing if the goal will be reached? Would PayPal be okay? Or Google Checkout? Or what?
If we can’t find any replacement for Kickstarter, we would have to do our own pledge-site using PayPal; we would only store email addresses and the pledge amounts, then manually collect the money when the goal has been reached. In this case, people who have changed their mind could have us end up in the same situation as the IndieGoGo-case.
Update: if we dropped all physical rewards, we could go down to about $8000. In this case, all we could offer to backers is a download link to the album prior to release, and delay the release by at least a month. What do you think?
Update 2: due to a few open questions, we opened The most remarkable survey on this entire planet My wife & I would be super-happy if you could take the time :)
Update 3: TwtSurvey closed the poll after 20 submissions. I opened a new one: The Fan-Funded Album Project Survey. This one should last. Your input would be much appreciated!
